They know that, they also know that Asia and Eastern Europe are major untapped markets, but it's not that simple, if it was they would all be in those markets already.

They may drop the price just to introduce 3d into homes like  they did with the PS2 even though they were the market leader

3D in homes isn't going anywhere anytime soon.  3DTV sales are absolutely abysmal and we won't be seeing any true penetration into the mainstream market for AT LEAST another 2 years.  If for some reason Sony does drop price 3D will be the last reason on earth.  No one is going out and buying a PS3 for 3D.  Their buying it for blu-ray, and the awesome games library.

Price Drop = higher sales = higher install base = more game sales = more money for Sony to recoup the losses on hardware (if any)

If they come out with a new model, it needs a rear USB for a PS Eye for Move.

should be called PSTriple

I've said this time and again. Sony has been making a comfortable profit with the PS3 for some time now, since early 2010. You only need to look at what happened back in quarter 2 2010 to realize that. Atrociously bad exchange rate issues made Nintendo post its first quarterly loss in years, whereas Sony posted a profit that quarter. They even stated last quarter that they've continued to make significant declines in production costs. Sony should be able to make a $50/€50 cut and still sell the PS3 at a profit. Especially in Europe and Japan where they sell it at a larger margin. And then of course you need to consider the revenue they're bringing in with Move and PSplus. And on top of that they still have the PS2 to cushion their profits with it still selling over a million units a quarter. I can only imagine the margins they're making on that thing by now.

PS2 sales have dropped to the point where they are nearing irrelevancy, so I doubt SCE's business plan relies up the PS2 in any way shape or form to buffer losses or subsidize hardware sales.

Someone will have to chase down the source, but allegedly SCE is currently making about a $50 profit on each PS3 sold.

I don't see a major ($100) price drop without a significant hardware redesign that's smaller, lighter, uses less materials, less silicon/die shrink GPU/CPU, less packaging, etc.

But with the current regular minor hardware updates, a $50 price cut isn't unreasonable by year end 2011.

Several major retail outlets are currently offering $50 rebates which is generally a hint that the regular MSRP may follow.

Hmmm I dunno about a new model yet.

the official price on LA doesn't matter. Most PS3s and games come from gray market.

IMO, I think that a price for a a sofware is subjective...Games in developping  counries should be like $30 max in the launch, having region protection for not allowing other countries to import.

Also, a dedicated PSN and PSN Store would be a good incentive. I have 4 accounts on my PS3(USA, UK, JP, HK) and I don' live in neither of those countries.